The cost of confidence in financial reporting
Corporate executives are much more confident in their financial forecasting and reporting output than they were a year ago - but it's at a price. A new study by The Hackett Group finds that 67 percent of executives are confident in the accuracy of their financials, up from just nine percent last year.
However this was the first year in many that companies were unable to reduce their overall finance costs and monthly closing cycles have been extended. In 2004, average companies spent 1.08 percent of revenue on the finance function, compared with 1.01 percent in 2002. And closing times rose from an average of 5.2 days in 2003 to 5.5 days in 2004.
For "world-class" companies (those ranked high in efficiency and value creation), closing times rose from 4.3 days in 2003 to 5.1 days in 2004. And costs for finance rose from 0.72 percent of revenue to 0.74 percent.